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Friday, June 9, 2023
CAMBRIDGE, MASS. , Jun 6 2023 (IPS) - On June 2, the U.S. government escalated its conflict with Mexico over that country’s restrictions on genetically modified corn, initiating the formal dispute-resolution process under the U.S.-Mexico-Canada Agreement (USMCA).
It is only the latest in a decades-long U.S. assault on Mexico’s food sovereignty using the blunt instrument of a trade agreement that has inundated Mexico with cheap corn, wheat, and other staples, undermining Mexico’s ability to produce its own food. With the government of Andrés Manuel López Obrador showing no signs of backing down, the conflict may well test the extent to which a major exporter can use a trade agreement to force a sovereign nation to abandon measures it deems necessary to protect public health and the environment.
The Science of Precaution
The measures in question are those contained in the Mexican president’s decree, announced in late 2020 and updated in February 2023, to ban the cultivation of genetically modified corn, phase out the use of the herbicide glyphosate by 2024, and prohibit the use of genetically modified corn in tortillas and corn flour. The stated goals were to protect public health and the environment, particularly the rich biodiversity of native corn that can be compromised by uncontrolled pollination from GM corn plants.
Where the original decree vowed to phase out all uses of GM corn, the updated decree withdrew restrictions on GM corn in animal feed and industrial products, pending further scientific study of impacts on human health and the environment. Some 96% of U.S. corn exports to Mexico, nearly all of it GM corn, fall in that category. It is unclear how much of the remaining exports, mostly white corn, are destined for Mexico’s tortilla/corn flour industries.
These were significant concessions. After all, there is no trade restriction on GM corn. Mexico is not even restricting GM white corn imports, just their use in tortillas.
No matter. In the U.S. government’s formal notification that it would initiate consultations preliminary to presenting the dispute to a USMCA arbitration panel, it cites a lack of scientific justification for the measures, denials of some authorizations for new GM products, and Mexico’s stated intention to gradually replace GM corn for all uses with non-GM varieties.
As Mexico’s Economy Ministry noted in its short response, Mexico will show that its current measures have little impact on U.S. exporters, because Mexico is self-sufficient in white and native corn. Any future substitution of non-GM corn will not involve trade restrictions but will come from Mexico’s investments in reducing import dependence by promoting increased domestic production of corn and other key staples. The statement also noted that USMCA’s environment chapter obligates countries to protect biodiversity, and for Mexico, where corn was first domesticated and the diet and culture are so defined by it, corn biodiversity is a top priority.
As for the assertion that Mexico’s concerns about GM corn and glyphosate are not based on science, the USTR action came on the heels of an unprecedented five weeks of public forums convened by Mexico’s national science agencies to assess the risks and dangers. More than fifty Mexican and international experts presented evidence that justifies the precautionary measures taken by the government. (I summarized some of the evidence in an earlier article.)
Three Decades of U.S. Agricultural Dumping
Those measures spring from deep concern about the deterioration of Mexicans’ diets and public health as the country has gradually adopted what some have called “the neoliberal diet.” Mexico has displaced the United States as the world leader in childhood obesity as diets rich in native corn and other traditional foods have been replaced by ultraprocessed foods and beverages high in sugar, salt, and fats. Researchers found that since the North American Free Trade Agreement (NAFTA) was enacted in 1994, the United States has been “exporting obesity.”
The López Obrador government recently stood up to the powerful food and beverage industry to mandate stark warning labels on foods high in those unhealthy ingredients. Its restrictions on GM corn and glyphosate flow from the same commitment to public health.
So does the government’s campaign to reduce import-dependence in key food crops – corn, wheat, rice, beans, and dairy. But as I document in a new IATP policy report, “Swimming Against the Tide,” cheap U.S. exports continue to undermine such efforts.
We documented that in 17 of the 28 years since NAFTA took effect, the United States has exported corn, wheat, rice, and other staple crops at prices below what it cost to produce them. That is an unfair trade practice known as agricultural dumping, and it springs from chronic overproduction of such products in that country’s heavily industrialized agriculture.
Just when NAFTA eliminated many of the policy measures Mexico could use to limit such imports, U.S. overproduction hit a crescendo, the result of its own deregulation of agricultural markets. Corn exports to Mexico jumped more than 400% by 2006, with those exports priced at 19% below what it cost to produce them. Again, from 2014 to 2020, corn prices were 10% below production costs, just as Mexico began seeking to stimulate domestic production.
We calculated that Mexico’s corn farmers lost $3.8 billion in those seven years from depressed prices for their crops. Wheat farmers lost $2.1 billion from U.S. exports priced 27% below production costs.
Thus far, the Mexican government has had little success increasing domestic production of its priority foods, though higher international prices in 2021 and 2022 provided a needed stimulus for farmers.
So too have creative government initiatives, including an innovative public procurement scheme just as the large white corn harvest comes in across northern Mexico. With corn and wheat prices falling some 20% in recent weeks, the government is buying up about 40% of the harvest from small and medium-scale farmers at higher prices with the goal of giving larger producers the bargaining power to then demand higher prices from the large grain-buyers that dominate the tortilla industry.
Swimming Against the Neoliberal Tide
With its commitment to public health, the environment, and increased domestic production of basic staples, the Mexican government is indeed swimming against strong neoliberal tides. Remarkably, it is doing so while still complying with its trade agreement with the United States and Canada.
Before U.S. trade officials further escalate the dispute over GM corn, they should look in the mirror and ask themselves if three decades of agricultural dumping are consistent with the rules of fair international trade. And why Mexico doesn’t have every right to ensure that its tortillas are not tainted with GM corn and glyphosate.
For more on the GM corn controversy, see IATP’s resource page, “Food Sovereignty, Trade, and Mexico’s GMO Corn Policies.”
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